The long term objective of this grant is to elucidate the mechanisms by which cell intrinsic transcription factors and developmental signaling pathways interact in the control of cell fate specification, cell proliferation, and differentiation during retinal development. This investigation will be carried out using Drosophila as a model system because of the high functional conservations of the genes and pathways controlling retinal development between the Drosophila and the mammalian systems and because of the ease of combining biochemical, genetic, cellular, and developmental approaches in the fly system to carry out in vivo studies. During Drosophila retinal development, expression of the proneural gene Atonal (ato) is critical for retinal progenitor cells to initiate neuronal differentiation. Ato expression is initially upregulated by the Ato 3' enhancer and is refined by the Ato 5' enhancer. Dissection of the Ato 3' enhancer revealed that Ato is directly regulated by retinal determination (RD) network proteins Eyeless (Ey), Eyes absent (Eya), and Sine oculis (So). Our preliminary studies revealed that Ato 3' enhancer is also regulated by bHLH proteins both positively and negatively. Posterior to the morphogenetic furrow (MF), Notch signaling negatively regulates photoreceptor differentiation by inhibiting Ato expression and simultaneously promotes S phase in the second mitotic wave (SMW). We show that Da is also required for S phase in the SMW and that both Da and Notch signaling regulate CycE expression in the SMW through the CycEdisc enhancer. We hypothesize based on our preliminary results that different bHLH dimers are involved in the activation or inhibition of the Ato 3' enhancer based on their interactions with the RD proteins. Similarly specific Da dimers are also involved in the activation of the CycEdisc enhancer in the SMW based on their interactions with the Notch signaling. In addition, the activation of Ato 3' enhancer also provides a nice in vivo system to investigate the function and regulation of RD factors. To test these hypotheses and to use the Drosophila system to characterize the RD network proteins, we have three Specific Aims: 1. Characterize the mechanisms by which Da regulates Ato 3' enhancer. 2. Characterize the function and regulation of Ey/Pax6 using the Drosophila model. 3. Determine the mechanisms by which Da and Notch signaling coordinate the control of cell proliferation and photoreceptor differentiation in the SMW. Knowledge obtained from this study in Drosophila can be applied to the mammalian systems and will provide new mechanistic insights into the control of cell proliferation and differentiation during normal retinal development. Understanding the control of normal retinal development is critical for the eventual development of new approaches for the prevention, diagnosis, and treatment of retinal diseases as well as other human diseases involving cell proliferation or differentiation defect.